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Tax law changes could shift executive comp strategies

Tammy Whitehouse | January 23, 2018

Massive changes in tax law with respect to executive compensation may give public companies reason to rethink how they pay their top brass.

The Tax Cuts and Jobs Act eliminates longstanding provisions around executive compensation that will make executive pay checks subject to far more taxation, both for companies and the executives themselves. The sting of that increased taxation is considerably softened by the massive cut in the corporate tax rate from 35 percent to 21 percent. The changes also remove the shackles companies have long borne in planning their executive compensation arrangements.

“We’re going to see companies looking for more efficient ways to do things,” says John Lowell, a partner with retirement services firm October Three Consulting. “Now people are...

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